See It Share It

See It Share It

What Is Laissez-Faire?

The pronunciation in English is lay-say-fair. Its French origins date back to the late Renaissance. As the story goes, it was first used about the year 1680, a time when the nation-state was on the rise throughout Europe. The French finance minister, Jean-Baptiste Colbert, asked a merchant named M. Le Gendre what the state could do to promote industry.

According to legend, the reply came: “Laissez-nous faire,” or “let it be.” This incident was reported in 1751 in the Journal Oeconomique by the free-trade champion Rene de Voyer, Marquis d’Argenson. The slogan was codified finally in the words of Vincent de Gournay: “Laissez-faire et laissez-passer, le monde va de lui même!” The loose translation: “Let it be and let goods pass; the world goes by itself.”

To generalize the principle: Leave the world alone, it manages itself.

A Simple, Beautiful Ideal

All these renderings express not only the idea of free trade — a main subject of dispute in 18th-century European politics — but also a larger and more-beautiful vision of the way society can be permitted to work.

This idea can be summed up in the phrase “laissez-faire,” or in the doctrine of what was once called simply liberalism, which today is clarified as classical liberalism. This idea is this: Society contains within itself the capacity for ordering and managing its own path of development. It follows that people should enjoy the liberty to manage their own lives, associate as they please, exchange with anyone and everyone, own and accumulate property and otherwise be unencumbered by state expansion into their lives.

In the centuries that have followed, millions of great thinkers and writers have elaborated on this core idea within all disciplines of the social science. Then as now, there stand two broad schools of thought: those who believe in state control of one or many aspects of the social order and those who believe that such attempts at control are counterproductive to the cause of prosperity, justice, peace and the building of the civilized life.

These two ways of thinking are different from what is called the Right and the Left today. The Left is inclined to think that if we let the economic sphere be free, the world will collapse, which advances some theory of the disaster that would befall us all without government control. The Right is similarly convinced that state control is necessary lest the world collapse into violent, warring, culture-destroying gangs.

The laissez-faire view rejects both views in favor of what Claude Frédéric Bastiat called “the harmony of interests” that make up the social order. It is the view that the artists, merchants, philanthropists, entrepreneurs and property owners — and not the cartelizing thugs with state power — ought to be permitted to drive the course of history.

This view is now held by millions of thinkers around the world. It is the most exciting intellectual movement today, and in places where we might least expect to find it.

The growth of the idea of laissez-faire in our times is infused with a digital energy. Distributed networks take the idea to a whole new level: no one in control but everyone in control, with no central point of failure.

But the idea itself is not new in world history.

Deep Roots

Though it is mostly associated with 18th-century British thought, it is a view of society that has much-deeper roots in the Christian Middle Ages and early Jewish thought. Nor is laissez-faire somehow a Western idea alone. The deepest roots of laissez-faire actually trace to ancient China, and even today, the thoughts of the masters offer a fine summary.

Here are some examples from non-Western thought:

Lao Tzu (6th century B.C.): “The more artificial taboos and restrictions there are in the world, the more the people are impoverished…The more that laws and regulations are given prominence, the more thieves and robbers there will be…”

“The Sage says: ‘I take no action, yet the people transform themselves, I favor quiescence and the people right themselves, I take no action and the people enrich themselves…’”

Chuang Tzu (369-286 B.C.): “I would rather roam and idle about in a muddy ditch, at my own amusement, than to be put under the restraints that the ruler would impose. I would never take any official service, and thereby I will [be free] to satisfy my own purposes….” The world “does simply not need governing; in fact, it should not be governed.”

Pao Ching-yen (4th century A.D.): “Where knights and hosts could not be assembled, there was no warfare afield…Ideas of using power for advantage had not yet burgeoned. Disaster and disorder did not occur…People munched their food and disported themselves; they were carefree and contented.”

Ssu-ma Ch’ien (145-90 B.C.): “Each man has only to be left to utilize his own abilities and exert his strength to obtain what he wishes…When each person works away at his own occupation and delights in his own business, then like water flowing downward, goods will naturally flow ceaseless day and night without being summoned, and the people will produce commodities without having been asked.”

These early beginnings of the idea began here but can be traced through thinkers of ancient Greece and Rome and through the Middle Ages, until the notion swept the world in the 18th and 19th centuries, giving rise to unheard-of prosperity, liberty and peace for all. In the 18th century and in large parts of the world (other than the English-speaking world), laissez-faire has been called liberalism or classical liberalism, a doctrine of social organization that can be summed up in the words of Lord Acton: Liberty is the highest political end of humankind.

20th Century Corruption

To be sure, the notion of liberalism was already corrupted early in the 20th century. As Ludwig von Mises wrote in his book Liberalism (1929), “The world today wants to hear no more of liberalism. Outside England, the term ‘liberalism’ is frankly proscribed. In England, there are, to be sure, still ‘liberals,’ but most of them are so in name only. In fact, they are rather moderate socialists. Everywhere today, political power is in the hands of the anti-liberal parties.”

That remains true today. And the revolt against this is often termed “libertarian,” a word that has long been associated with a primary concern for human liberty. It was a neologism for the postwar generation that was synonymous with liberalism. In current understanding, it refers to a tightening and radicalizing of the old liberal view. It asserts the inviolability of property rights, the primacy of peace in world affairs and the centrality of free association and trade in the conduct of human affairs.

It Can Exist

Such a society is not historically unprecedented. Murray Rothbard wrote about Colonial America as an example of a wildly successful experiment of society without centralized state management. Medieval Europe made the first great economic revolution without recourse to the power of the nation-state. David Friedman has documented competitive legal orders in medieval Iceland. Other writers go so far as to say that given how we conduct our lives day to day, relying on the productivity of private institutions and associations, we never really leave a practical anarchy.

As Mises says, liberalism/libertarianism/laissez-faire is not a completed doctrine. There are so many areas remaining to be explored and so many applications to make both in history and in our time. The most exciting books of our time are being written from the vantage point of human liberty. The state is on the march, but the resistance is growing.

It is a debilitating thing to watch the state push and push to gain more power, under the flags of Equality or Greatness or Security or Fairness, but it is a source of joy to know that ideas are more powerful than all the armies of the world. Reason, clarity, innovation, and relentless work for what is right and true will eventually lead the idea of laissez-faire to victory.

Jeffrey Tucker is Director of Content for the Foundation for Economic Education. He is also Chief Liberty Officer and founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books. He has written 150 introductions to books and many thousands of articles appearing in the scholarly and popular press.